On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest...

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Accounting

On December 31, 2015, Martin Corp invested in Marlin’s 5-year,$200,000 bond with a 5% interest rate for $191,575. The bond payssemiannual interest on June 30th and December 31st. The fair valuesof the bonds at the end of 2016~2018 are $194,500, $194,200, and$195,750. Martin sold its investment in Marlin’s bond on July 1,2019 at 98 ½ (i.e. selling price is = 98.5% of the face value).Please answer all following questions using Excel Template.
C. Assuming the bonds are classified as held-to-maturityinvestments,
• Prepare the journal entries on December 31, 2015
• Prepare the journal entries related to the bond on December31, 2016.
• Prepare the journal entries related to the bond on December31, 2018.
• Prepare the journal entries related to the bond on July 12019.
D. Assuming the bonds are classified as AFS investment, preparethe journal entries on aforementioned dates.
E. Assuming the bonds are classified as Trading investment,prepare the journal entries on aforementioned dates.

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3.6 Ratings (362 Votes)

C Held to maturity Dec 31 2015 5 Marlins Bonds 19157500 CashBank 19157500 Dec 31 2016 no adjustment Dec 31 2018 no adjustment July 01 2019 CashBank 19700000 5 Marlins Bonds See Answer

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